Personal computers are often sold with bundled software packages that are pre-installed on the computer. Similarly, peripherals for computers are sold with bundled software packages made available on an enclosed media such as a DVD, CD-ROM, floppy disk, or other known portable medium. Alternatively, software used with personal computers and computer peripherals may be downloaded from a remote server over a network. These software packages typically provide functionality to be used by the end user with the purchased computer or peripheral device. For example, a DVD optical drive may be bundled with software used to play or record DVD movies or data. Similarly, an optical scanner may be sold with bundled software for capturing and viewing a scanned image, manipulating images, providing optical-character recognition (OCR), or software to enable a scanner and printer shared by the same personal computer to be used as a photocopier. Likewise, a personal computer may be sold with pre-installed anti-virus software, software tools for viewing digital photographs, video editing software, or operating system software.
These bundled software products often include features that incorporate portions of executable software that require the payment of royalties to technology holders. The technologies used in a single software product may be developed and licensed from one or more technology holders. A software provider typically licenses the intellectual property rights from each of the technology owners before selling the product to the end user. A license typically covers each copy of the software sold. This licensing cost is incorporated into the cost of the software product and passed on to the end user. In the case of playback software used to play commercially produced DVD movies, this software generally involves considerable per-unit licensing fees associated with licensed technologies that are required for playback of certain content. The costs of these licenses are passed on to the end user in the purchase price of the playback software or hardware that bundles the software. An example of such a licensed feature is Dolby® Digital audio decoding, provided by Dolby Laboratories. Specifically, a license to the Dolby Digital technology is required within DVD playback software used to decode a DVD movie incorporating this audio technology.
However, the actual percentage of end users who playback DVDs requiring the Dolby technology is less then 100% because some users only play personal content, while others may use the DVD drive only for data storage or other computing purposes. Further, some users may not use their DVD drive at all. In the case of Dolby Digital audio cited above, this technology is required for playback of commercial DVD discs using this technology. However, the decoding technology is not needed to view the large library of DVD movies which do not use Dolby Digital technology. For these users, the license fees associated with the technologies are wasted.
Prior art licensing systems, as shown in FIG. 1A, provide for an interaction between an end user 10 and a software provider 20. In a first instance, the software provider 20 directly provides a software product to the end user 10 in exchange for compensation from the end user 10. In this case, the licensing fees for technologies such as Dolby Digital may be paid to the technology holders 30 by the software provider 20 for each copy of software sold, without regard to the actual use of the licensed technologies by the end user 10. In return, technology holder 30 provides a technology license for each copy of software sold by software provider 20.
In the context of bundled DVD player software, the prior art system shown in FIG. 1B provides for licensing bundled software between an end user 10, hardware provider 40, a software provider 20, and a technology holder 30. A software provider 20 provides a license for a software product with unlimited functionality to a hardware provider 40 in exchange for compensation. The end user 10 is provided the software product 12 as bundled software included with a computer or computer peripheral supplied by the computer or hardware provider 40. Under the current state of the art, the licensing fees for technologies such as Dolby Digital are paid to the technology holders 40 by the software provider 20 (and/or the hardware provider 40) without regard to the actual use of the licensed technologies by the end user 10. Thus, because usage of the specific features within a software product are not typically tracked, a license to a particular technology is required for each software product 12 sold containing the technology. Therefore, there is a discrepancy between the cost of the technology license (by the hardware or software provider 20) and the actual need (by the end user 10), which is disadvantageous for both the end user 10 and software provider 20. For end user 10, the money for the license is wasted if the technology is not used. For the software provider 20, the high cost of license fees will either reduce profit margins or be passed on to the end user 10 in the selling price, which can inhibit market share.
Accordingly, a need exists in the industry for a system and method of licensing software that addresses the aforementioned deficiencies and inadequacies.